This one's a few weeks old but it doesn't look like anyone started a thread on it. And that needs to be remedied because it's a real gem.
http://www.digitaltrends.com/cool-tech/bitcoin-robbery-exposes-the-currencys-flaws/This is not the first time Bitcoin has lost money to hackers, but the discovery that they have user information stored in unencrypted files might be what finally prompts a full-fledged run on the Bitcoin bank; no one’s eager to keep their money in an unlocked vault.
Mainstream economics writers are enjoying a good chuckle at the crushing of Bitcoin’s libertarian dreams. Solidly centrist website The Atlantic was happy to point out that U.S. banks are FDIC insured in order to guarantee that in the event of a robbery, account holders don’t have to depend on the goodwill of the bank manager to get their money back. Bitcoin’s popularity as currency of choice for skeevy sites like drug-dealing marketplace Silk Road further ensures that getting robbed doesn’t win it much sympathy, and there’s no word on whether Bitcoin will turn to the government agencies it previously scorned in order to track down the thieves.
Bitfloor is shut down while Shtylman scrambles to repay users. He promises that international users who wish to withdraw their money can send him an e-mail requesting withdrawal, a weirdly informal system for currency exchange which calls to mind disturbing images of Depression-era banks understaffing their teller windows so customers couldn’t take out all their money at once. There would be a certain delicous irony if the latest debacle reminds the idealistic libertarians of Bitcoin exactly why government currency regulations became popular in the first place.
Good stuff, right? But the best part comes when the author responds to some comments and reveals the true extent of his ignorance:
Wait, no Bitcoin company? So who is empowered to issue Bitcoins? And if Bitfloor is just, like, some random trading exchange, is there any reserve where a holder of Bitcoins can be assured that he'll be able to exchange them for another currency?
AND
I read the white paper, and it made so little sense I concluded there was a scam. If anyone can make Bitcoins, you've got a recipe for inflation. If everyone can make Bitcoins but there's a ceiling, you've got a recipe for even worse deflation. And either way, you've got no protection if something goes wrong, as it inevitably will. I'm eagerly awaiting the point where the Bitcoin story goes full Bioshock.
